Banking Law

In the not-so-new normal, clients continue to refuse to pay full freight for inexperienced first-year attorneys to work on their legal matters — or, as one law firm recently mused, “client demand for first year associates has declined.”

What’s a Biglaw firm to do?

It seems that one firm has found a pretty good solution to this problem: make someone else hire those lawyers to work as junior in-house lawyers, and then bring them into the fold as associates after they’ve gained some real-world experience.

Which Biglaw firm has teamed up with a big bank — the biggest bank in the U.S. — for this program?

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[T]he solution to the knot [of complex legal problems] has been to add more string. Simply adding more lawyers and compliance professionals will only create far worse, more complicated and more costly problems.

Geoffrey A. Moore, author of the bestselling Crossing the Chasm (affiliate link) and other books, and Mark Harris, CEO of Axiom, in an interesting DealBook piece about the need to rethink the current model for delivery of legal services.

It is perhaps a truism by now, but if you are doing business with China, you need to be on your guard against fraud. Recently, an old chestnut known as “the switched bank account scam” has seen a dramatic resurgence, because it has become so easy to perpetrate and so difficult to prevent.

Here’s how bad things have gotten: a year ago Interpol released a Purple Notice detailing the scammers’ M.O., but my firm’s China lawyers are receiving even more frantic phone calls now than last year….

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You can’t blame a bank for trying. Putting on a happy face is part of the job of being a high-profile financial entity, especially after the financial powers exhausted all their goodwill with the American people when they crashed the global economy and used taxpayer dollars to bail themselves out.

But when a bank touts its 4Q profits — and good for them for that triumph — the media doesn’t have to accept the bank’s rosy financial picture at face value. Especially when a quick trip over to the Annual Report reveals that outside of press releases, the bank has some serious concerns over its own financial situation…

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As we’ve chronicled in these pages, the powerhouse firm of Weil Gotshal has been experiencing some upheaval. The big summer layoffs have been followed by a steady stream of partner departures, mainly from offices outside the power center of New York.

Many of the defections have taken place in Texas, but Weil’s Washington outpost has also been hard hit. Last month, that office lost three IP litigators to Greenberg Traurig. Said one of our sources, “IP was one of Weil D.C.’s most profitable practice groups. Expect downsizing or partner acquisition from another firm to compensate for loss.” And that wasn’t all. Earlier this month, BuckleySandler snagged Walter Zalenski, a prominent player in financial services regulatory law, from Weil.

Today brings news of another departure from Weil in Washington. Who is leaving now, and where is he going?

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* Stan Stallworth, the Sidley partner accused of sexual assault, has hired a prominent criminal defense attorney to represent him in the case while the firm stands by its man. [Am Law Daily]

* Wall Street regulators are considering approval of a formidable version of the Volcker Rule that would ban banks from proprietary trading. Voting occurs later today. [DealBook / New York Times]

* Skadden Arps has asked a judge to toss an FLSA lawsuit filed against the firm by one of its document reviewers. Aww, silly contract attorney — there’s no way you’re getting overtime pay. [Law360 (sub. req.)]

* Weil Gotshal is still leaking like a sieve. This time, Bruce Colbath, a partner from the firm’s New York office, defected to the Antitrust and Trade Regulation practice group at Sheppard Mullin. [Market Wired]

* Lawyerly Lairs, China Edition: Raymond Li, chair of the Greater China practice at Paul Hastings, just purchased a townhouse for about $95 million — and paid “mostly in cash,” homie. [Wall Street Journal]

* They’re extremely tardy to the party, but if the ABA Section of Legal Education and Admissions to the Bar gets its way, law schools will be subject to random audits of their employment stats. [ABA Journal]

* It’s a tough job that “can really beat you down,” but an organization called Gideon’s Promise just made it a whole lot easier for law students to secure jobs as public defenders in the South. [National Law Journal]

‘Gee, my life is so meaningful. Thanks a lot, law school!’

* Despite the fact that the overall demand for legal work was down by five percent during the first nine months of the year, law firms still raised their hourly rates. Hey, what can we say? Math is hard. [Am Law Daily]

* After instructing his lawyers not to speak during what he called a “sham sentencing,” Whitey Bulger received two life sentences plus five years. Don’t worry, the appeal won’t be a sham. [National Law Journal; CNN]

* Attention c/o 2015: the New York City Bar Task Force is considering throwing commercial paper out the window in favor of administrative law. Something something arbitrary and capricious. [New York Law Journal]

* What is law school for, aside from collecting gigantic mountains of non-dischargeable student loan debt? Apparently it’s for creating a more meaningful life, because with poverty comes clarity. [WSJ Law Blog]

* In the very near future, you might need a license to conduct business with virtual money like bitcoin. The Brothers Winklevii are probably already preparing their paperwork to file. [DealBook / New York Times]

* Parties in the greenhouse gas cases before SCOTUS have agreed to trim the number and length of their briefs to reduce the number of times “go f@ck yourself and die” is written. [Blog of Legal Times]

* The latest patent reform bill up for debate promises that it will put an end to the trolls by forcing them to do more work before filing suit. If only it were that easy to keep the trolls at bay. [National Law Journal]

* Do the hustle, and blame it on Becca! A jury has found that Bank of America is liable for selling defective mortgages, and the potential penalty could be up to $848 million. [DealBook / New York Times]

* Since the law was puff, puff, passed, lawyers in Washington State have politely asked their Supreme Court if and when they’ll allowed to smoke weed and represent clients that sell it. [Corporate Counsel]

* Class certification in the Alaburda v. TJSL lawsuit over allegedly deceptive employment statistics has officially been denied. We guess that all good things must come to an anticlimactic end. [ABA Journal]

* Another law school gets it: the U. of St. Thomas will its freeze tuition at the low, low price of $36,843, allowing students to pay a flat fee for all three years of education. [Campus Confidential / Star Tribune]

* If you’d like to ace your law school interviews (which apparently are a thing these days), it helps if your personality doesn’t inspire ritualistic seppuku. [Law Admissions Lowdown / U.S. News & World Report]

* Michael Skakel, the Kennedy cousin convicted of killing, was granted a new trial due to ineffective assistance of counsel. Getting away with murder? Aww, welcome to the family, Mike! [Washington Post]

Novus Law School’s epitaph?

Ed. note: In honor of Columbus Day (and Canadian Thanksgiving), Above the Law will be on a reduced publication schedule today. We will be back in full force tomorrow.

* Justice stops for no one, not even a broken Congress. With the end of days approaching quickly for federal courts in terms of funding (or the lack thereof), many judges are lashing out and declaring all their employees essential. [National Law Journal]

* Legal expenses can be especially “painful,” even for the biggest of banks, but sadist firms like Sullivan & Cromwell, Paul Weiss, and WilmerHale are really getting their rocks off on Jamie Dimon’s suffering. [DealBook / New York Times]

* DLA Piper’s future’s so bright it’s got to wear shades — and appoint a new co-managing partner in New York City, its largest office. Congratulations to Richard Hans, you’ve co-made it! [New York Law Journal]

* “It’s not just about me.” Jim Tanner, a Williams & Connolly partner who represents Jeremy Lin, is leaving the firm to start his own sports management business, and he’s taking people with him. [Bloomberg]

* “I have no apologies to make about anything I did.” Steven Donziger of Chevron/Ecuador infamy will be defending himself in court this week in what’s being called a legal cage match. [Wall Street Journal]

* “Touro is asking a judge to declare the school a diploma mill.” Irony alert: Touro wants Novus University Law School, a school supposedly conferring “worthless law degrees,” to be stopped. [New York Post]

* If you think SCOTUS abused its discretion in the early abortion cases, you’re going to love this book (affiliate link), a “cautionary tale” about consequences of decisions like Roe v. Wade. [Wall Street Journal]

* How low can the legal market go? Manhattan firm lists full-time associate opening for $10/hr. “NY to 10.” (Screenshot here if the ad is removed). [Craigslist]

* Iowa is giving out gun permits to the blind. Sadly this is not a new phenomenon as David Sedaris explained years ago. [FindLaw]

* Business Insider has fired its CTO because… he’s a jerk. An important lesson in what free speech does and doesn’t mean. [Popehat]

* A UNC professor pulled over for a DWI has sparked a Fourth Amendment battle because she was arrested by a fire truck. [Fox News]

* Banks facing SEC enforcement actions are basically just spinning a roulette wheel and praying it doesn’t land on “Rakoff.” [Ramblings on Appeal]

* On a related note, Senator Elizabeth Warren spoke at the AFL-CIO conference and discussed the corporate capture of the federal courts (at 1:23:45 after the jump)…

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